Cyber thieves loot O.C. escrow company

More than $1.1 million remains missing from a Huntington Beach escrow firm’s bank account after cyber thieves reportedly hacked into their computer and wired the funds to China and Moscow.

State officials shuttered the Beach Boulevard business, Efficient Services Escrow Group, in the wake of the hacking.

The theft left about 150 to 200 people short of cash that was to be disbursed from more than 100 escrow accounts, said Beverly Hills attorney Peter A. Davidson, the state-appointed conservator in the case. Forty-one ongoing real estate transactions were hindered by the swindle.

A hearing is planned for 1:30 p.m. Tuesday in Orange County Superior Court to consider the appointment of Davidson as receiver to take over the firm and attempt to recover the missing funds.

The case is one of several nationwide in which cyber thieves used malware and other computer viruses to gain passwords, loot a business’ bank account and wire the cash to China, according to state and federal fraud alerts.

Escrow officers are hired to serve as neutral third parties in real estate and other business deals, holding money until all the terms of a transaction, such as the transfer of deeds, are met.

In the Orange County case, almost $1.56 million went missing from the firm’s trust account, Davidson said.

The first theft occurred on Dec. 17, when scammers wired $432,215 to Moscow, the California Department of Corporations, which issues escrow licenses, said in a petition filed in Orange Count Superior Court.

Scammers then wired $563,112 on Jan. 24 and $536,112 on Jan. 30. The money from the last two wires went to a trade company in Heilongjiang Province, located in the northeast corner of China.

Efficient Services Escrow reported the theft on Feb. 22, two months after the first unauthorized transfer. The state’s petition stated that Efficient Services Escrow failed to maintain its books and records in accordance with state law.

The bank managed to recover the $432,215 sent to Moscow, but was unable to get $1.1 million back from China, Davidson said.

Davidson said most of the affected escrows involved the sale of homes. The largest amount still owed from escrow funds totaled $545,000, and at least two funds were in the six figures, he said. One fund owed about $72,000 to escrow parties.

About 40 percent of the amount owed escrow parties has been repaid. Those owed money included professionals such as termite companies and real estate brokers, he said. The 41 active escrows were transferred to other escrow firms, and some of those escrows closed after involved parties came up with the missing cash themselves.

The FBI issued a warning in April 2011, saying that scammers stole $11 million from small and medium-sized businesses over the previous year, wiring the funds to economic and trade companies in Heilongjiang Province.

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